The Indian food delivery market is entering its biggest growth period to date. This time around, the main drivers are not new customer acquisition but frequent reorders, new market penetration, especially in tier-2 cities, and an increased Average Order Value (AOV), as per a report by Investec.
The sector was valued at around $9.1 billion in 2024 and is expected to grow at a Compound Annual Growth Rate (CAGR) of 19%. At this rate, the sector will reach a whopping $27 billion by 2030, as consumption patterns change driven by digital adoption and urbanisation.
The report also mentioned that the size of India’s broader food services market has grown from $42.1 billion in 2020 to $73.7 billion in 2024. Moreover, this number is expected to cross $115 billion by 2030, at a CAGR of 11-12%. However, the report also noted that penetration of the online food delivery ecosystem in India remains low, at only 13% of the total food consumption in the country. This is significantly lower than other top economies in the world, such as the US (58-62% penetration) and China (42-46% penetration). This, however, reflects India’s strong preference for home-cooked meals, which offers marketers yet another vertical to explore in Indian markets.
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Moreover, structural shifts, such as people living in smaller households, longer working hours, urbanisation, and migration away from family support systems, are prompting people to place more online orders.
